Abstract: This paper considers the evolution of strategies pursued by established and emerging firms as they attempt to commercialize radically new industrial technology. A general framework is proposed to relate strategic options and choices to the evolution of technologies, organizations and industry positions following a technological discontinuity. Empirical evidence from the emerging biotechnology field is presented to illustrate these patterns of evolution. The framework is then used to examine the roles played by strategic alliances in the evolving strategies of participants in biotechnology.

Abstract: The emergence of radically new industrial technology is a powerful competitive force with significant strategic implications. Entirely new industries may develop around an emerging technology as existing industries are transformed or destroyed in its wake. Schumpeter1 aptly characterized such technological change as a force of “creative destruction,” which leaves both winners and losers among industrial firms. What factors distinguish these firms and their strategies for dealing with technological change? This paper reports on a study of the strategic options available to firms facing radical technological change, and the strategic choices made by firms involved in the emerging biotechnology field. Of particular interest are the widespread use of external relationships and their roles in the technology strategies of established firms. The paper begins with brief definitions of established and emerging firms, followed by a review of insights into the strategic nature of technological change drawn from prior studies. The evolving positions of established and emerging firms in the biotechnology field are then described with some elaboration of the collaborative relationships which characterize its early development. A conceptual framework is proposed to differentiate the strategic choices made by established firms in response to advances in biotechnology, and this framework is used to examine the roles played by selected interorganizational relationships in corporate strategies. The paper argues that these external alliances are appropriate initial responses to the strategic management challenges presented by radical technological change, but that the nature and significance of these alliances and associated corporate strategies change as the technology advances toward commercialization.

Teaching

Past Courses

MGMT237 - MANAGEMENT OF TECHNOLOGY

The course is designed to meet the needs of the future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technology-based industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems.

In the News

With new headlines every week confirming the poor health of the U.S. economy, one might wonder who in their right mind would pick the present time to launch a new company. Actually, say some Wharton faculty, the outlook isn’t all that bad if you choose the right business in the right market. Or, as one professor says: "Asking whether or not it’s a good time to start a business is like asking how big is a fish…”